Friday, July 06, 2007

AZ, Silence team up in RNAi

AstraZeneca is joining the RNA interference crowd via a deal announced earlier today with Silence Therapeutics (formerly SR Pharma/Atugen). AZ will pay the biotech an upfront fee of ₤7.5 million, two thirds of which is an equity investment in Silence at 146p/share, a 10% premium to the company's recent share price. The companies will focus on respiratory diseases, discovering and developing proprietary siRNA molecules against up to five targets over three years.

The alliance is certainly small potatoes in comparison with the Big Pharma's embrace of other large molecule technologies (see MedImmune etc.), but not wholly out of synch with the vast majority of deals in the RNAi space. Until the conspicuously high-value takeout of Sirna Therapeutics by Merck & Co. last year, just about every siRNA agreement was back-end loaded. With up to $400 million in fees and milestones this one is no different. A more apt comparison would be GSK's April 2006 deal with Sirna in the respiratory area, which netted the biotech only $12 million up-front (half in exchange for equity).

For Silence the AZ backing provides not a small degree of validation in a space that's quickly becoming crowded with variations on a technological theme and a multitude of IP skirmishes. Moreover respiratory disease is not Silence's singular focus--IN VIVO Blog is anticipating a bigger deal in the oncology area. Our most recent coverage of the RNA interference space is here.

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